KOLEJ PROFESSIONAL MARA AYER MOLEK
COMPANY LAW
(LAW2513)
TUTORIAL 8 –
THE COMPANY CONSTITUTION
1. Which of the following statements
regarding the legal effect of memorandum and articles of association is UNTRUE?
A. It is a binding contract between members
and other members of the company
B. A member can enforce any provision in the
articles of association against the company in the case the company acted
against it
C. An outsider also has the right to enforce
provisions in the company’s articles of association
D. It is a binding contract between company
and its members
2. Which of the following is not the feature
of a memorandum of association of a company?
A.
It is a basic constitutional document of the
company
B.
No provision in the memorandum can be altered
C.
It has the effect of a contract between the
company and each member
D.
It sets out the structure and aim of the
company
3. If a company limited by shares does not
lodge its own articles, it may adopt,
A.
Table A of the Third Schedule
B.
Table B of the Third Schedule
C.
Table A of the Fourth Schedule
D.
Table B of the Fourth Schedule
4. What is the minimum number of subscribers
in the memorandum of association of a company?
A.
1
B.
2
C.
3
D.
4
5. How may an act done by a company outside
its object clause be called?
A.
Part of indoor management
B.
The act of a separate legal entity
C.
Intra vires
D.
Ultra vires
6. A company registered as a private company
under the Companies Act 1965 must have the following characteristics in the
memorandum and articles of association except:
A.
There exist restrictions on the right to
transfer shares
B.
The number of members can be more than 50
C.
The company will have the word ‘Sendirian’
as part of its name
D.
There exist restrictions on invitation to
public to subscribe share
7. What is the effect of an ultra vires
transaction under the Companies Act 1965?
A.
The transaction is voidable
B.
The transaction is void
C.
The company is bound by the transaction
D.
The transaction is valid if it is ratified
by the company
8. The purpose of object’s clause in the
memorandum of association in the company is to _______________________
A. determine what a company can do and what
it cannot do
B. prevent the company from entering into a
contract
C. set out rules and regulation in the
company
D. minimize the authority of a company
9. The effects of section 20 on the ultra vires doctrine are
I.
the transaction is valid
II.
the third party can take legal action
against the company
III.
the third parties are not protected
IV.
third party cannot take legal action again a
company
A.
I and II
B.
I and IV
C.
I and III
D.
II and IV
10. The expression “bona fide for the benefit
of the company as a whole” means
A the benefit of the majority shareholders
in the company
B. the benefits of the creditors only
C the benefits to the majority of the
members only
D the benefits which any individual
hypothetical member of the company would enjoy directly or through the company
11.
Article of Association may be define
as …
A. The provision which regulate the
relationship of the company and outsider dealing with it.
B. The regulation governing the internal
management and operation of the company
C. The provision regarding the main object
and powers of the company
D. The regulation governing the relationship
between employer and employees
12. The
documents which sets out the objects and powers of the company, the
relationship between the company and outsiders and the extent of member’s
liability is known as,
A. Certificate of
incorporation
B. Articles of association
C. Memorandum of association
D. Prospectus of the company
13. How a company may get its power?
I.
Explicitly from the object clause in the
Memorandum of Association
II.
Impliedly and incidental to achieve the
objects of the company
III.
Power implied by law
IV.
Power from the application of section 19 (1)
of Companies Act 1965
A.
I, II & III only
B.
I, II & IV only
C.
I, III & IV only
D.
I, II, III & IV
14. What is the Common Law effect on ultra vires transaction entered by a
company?
A.
The transaction can be enforced by the
company
B.
The transaction can be ratified by the members
C.
The company could not be bound by such
transaction
D.
The third party can exercise their legal
rights under such transaction
15. Why the Articles of Association are called
as special contract?
A.
The contract binds all the existing members
who sign the memorandum and the incoming members
B.
The contract is made with a special person
recognized by the company
C.
The contract is signed for a special event
D.
The contract is made for a special reason
recognized by the board of directors
16. Among clauses of the Memorandum of
Association includes the following except:
A. the object of the company.
B. the name of the company.
C. a liability and share capital clause.
D. power of directors.
17. The memorandum of Association of Temasek
Co. Ltd expressed the company’s main object is “to engage in the tailoring
business”. However, in a year of 2005, the company had signed an agreement with
Nona Ramai Bhd to purchase a cosmetic product although it was not within the
objects of the company. Later, Temasek Co. Ltd refuses to pay for the cosmetic
product which had been supplied to it.
The above contract
is...
A. enforceable and the third party has the
right to take a legal action against the
company.
B. invalid as the company has no capacity to
enter into it.
C. enforceable as it is against company’s
Memorandum of Association.
D. ultra vires the company’s Memorandum of
association and has no legal effect.
18. Every company must have this document which
contains internal regulations of the company that concerns the company and its
dealings with the members.
This document is called ____________.
A. Memorandum of Association.
B. Books of Partnership.
C. Companies Act
D. Articles of Association.
19. Articles of Association (AOA) may be freely
altered or added to subject to companies Act 1965. When voting to alter the
articles, a member must vote ‘bona fide’ for the benefit of the company as a
whole. A company’s ability to alter its article may be restricted in certain
situations. Which of the following statements is correct?
I.
The AOA cannot be altered so as to include
clause contrary to Companies Act 1965.
II.
The AOA may not be altered to force members
to subscribe more shares and thus increase their liabilities.
III.
The AOA may be altered to force more members
to subscribe more shares and thus increase their liabilities.
IV.
The AOA cannot be altered so as to meet the
company breach its existing contract.
A. I, II
B. I, II, III
C. I, II, IV
D. I, II, III, IV
20. Besides its legal effect as a contract that
binds the company and members, Memorandum and Articles of Association are also
considered to be a binding contract between______________.
A.
company and outsiders.
B.
members and other members of the company.
C.
members of the company and outsiders.
D.
outsiders and other outsiders to the
company.
21. Since Memorandum and Articles of
Association are considered as a binding contract between the company and
members, it carries the effect that_______________.
A. the company is prohibited from taking
legal action against its members for breach of any provision in the Memorandum
and Articles of Association
B. the company can take legal action against
its members for breach of any provision in the Memorandum and Articles of
Association
C. the members is prohibited from taking legal
action against the company for breach of any provision in the Memorandum and
Articles of Association
D. the outsiders can take legal action
against the company and its members for breach of any provision in the
Memorandum and Articles of Association
22. “In the absence of its own Articles of
Association, the content of a limited company’s articles will be determined by
reference to the Companies Act 1965.”
Which schedule of
the Companies Act 1965 does the above statement refer to?
A.
Table A of the First Schedule
B.
Table A of the Second Schedule
C.
Table A of the Third Schedule
D.
Table A of the Fourth Schedule
23. “Memorandum and Articles of Association are
considered to be a binding contract between the company and its members.”
Which of the followings best explains
the above statement?
A. Only the company is obliged to obey all
the provisions in the Memorandum and Articles of Association but not the
members.
B. Both the company and its members can sue
and be sued for breach of any provision in the Memorandum and Articles of
Association.
C. Only the members are obliged to obey all
the provisions in the Memorandum and Articles of Association but not the
company.
D. Neither the company nor its members can
sue and be sued for breach of any provision in the Memorandum and Articles of
Association.
24. “Article 23 of Shrek Sdn Bhd’s Articles of
Association provides that ‘the lessor of
the company has the right to appoint a director for the company.’ Bank
Fiona which is Shrek Sdn Bhd’s lessor intends to enforce Article 23 and
nominate one of its branch managers, Mr Danny as director for Shrek Sdn Bhd.”
What is the
principle which could be used by existing directors of Shrek Sdn Bhd to refuse
the nomination from Bank Fiona?
A. The Articles of Association has no legal
effect between a company and outsiders.
B. The Articles of Association has no legal
effect between a company and its directors.
C. The Articles of Association has no legal
effect between a company and its members.
D. The
Articles of Association has no legal effect between members of the company
inter se.
25. Besides
its legal effect as a contract that binds the company and members, Memorandum
and Articles of Association are also considered to be a binding contract
between______________.
A.
company and outsiders.
B.
members and other members
of the company.
C.
members of the company and
outsiders.
D.
outsiders and other
outsiders to the company.
26. Since
Memorandum and Articles of Association are considered as a binding contract
between the company and members, it carries the effect that_______________.
A. the
company is prohibited from taking legal action against its members for breach
of any provision in the Memorandum and Articles of Association
B. the
company can take legal action against its members for breach of any provision
in the Memorandum and Articles of Association
C. the
members is prohibited from taking legal action against the company for breach
of any provision in the Memorandum and Articles of Association
D. the
outsiders can take legal action against the company and its members for breach
of any provision in the Memorandum and Articles of Association
27. Why
an outsider cannot sue or enforce his right provided in Memorandum or Articles
of Association of a company?
A.
The Memorandum and Articles
of Association is not a contract between the company and outsiders.
B.
The Memorandum and Articles
of Association is not a contract between the company’s shareholders among
themselves.
C.
The Memorandum and Articles
of Association is not a contract between the company and its members.
D.
The Memorandum and Articles
of Association is a contract between outsiders of the company.
